Tax Credit What is it? You can apply for two tax credits, Child Tax Credit and Working Tax Credit - payable from April 2003 you can claim either one alone or both together if working. The general rule is that to qualify for tax credits you must be aged 16 or over and usually live in the United Kingdom. Couples must make a joint tax credits application. If you are part of a couple, you cannot decide to apply as a single person.

Child Tax Credit is for people who are responsible for at least one child or qualifying young person. Child Tax Credit is paid if you work or not, and is paid direct to the person who is mainly responsible for caring for the child or children. If you are a lone parent you will receive the payment. Many people have transitionally protected child additions within their existing Income Support claims if claimed pre 2003.

Working Tax Credit is for people who are employed or self- employed (either on their own or in a partnership), who usually work 16 hours or more a week, and expect to work for at least 4 weeks and who are aged 16 or over and you are either: responsible for at least one child aged 16 or over with no children but who are disabled aged 25 or over and usually work at least 30 hours a week over 50 and starting work after claiming certain other benefits for over 26 weeks

As part of Working Tax Credit you may qualify for help towards the costs of childcare. If you receive the childcare element of Working Tax Credit, this will always be paid direct to the person who is mainly responsible for caring for the child or children, alongside payments of Child Tax Credit. The amount of Tax Credits you receive will depend on your annual income for the previous tax years, although sometimes it will be beneficial to ask for an in-year award.

The Working Tax Credit calculation add all the elements due together? The basic element Single, couple or lone parent 30 hour element If you or your partner work over 30 hours or if you have children and one works at least 16 hours and the total joint hours add to over 30 hours

Disability element: (Must be the person working) On DLA or AA at any level or Constant Attendance Allownace (CAA) or Mobility Supplement (MS) paid by Industrial Injuries or War Pension Have paid or been paid in the last 6 months either? Incapacity Benefit (IB) at the long term or short term high rate Severe Disablement Allowance (SDA) Employment Support Allowance (ESA) and / or a combination of Statutory Sick Pay (SSP) and ESA for at least 28 weeks

You have had the disablilty premium included in your Housing Benefit (HB), Council Tax Benefit (CTB), Income Support (IS), Income Based Jobseekers Allowance (IBJSA) You had been working but due to sickness you have been unable to work for over 20 weeks you then return to work part time or at reduced hours and this disability is expected to last for 26 weeks

Severely Disability element: You or your partner receive? The high rate care component of Disability Living Allowance The high rate Attendance Allowance

50 Plus element: (16 or 30 hours) You get this if you are over 50 and working at least 16 hours and either: For the previous 26 weeks you had Income Support, Jobseekers Allowance, Incapacity Benefit, Severe Disablement Allowance, Employment Support Allowance or your old age Pension & Pension Credit

You had your national insurance credit paid due to signing on or sickness Time spent previously on Carers Allowance, Bereavement Allowance or Widowed Prents Allowance can count towards this 26 week period as long as you have one of the above at the date of claim. The 50 Plus element is limited to one year. Child Care Costs: Add any qualifying child care costs

The Child Tax Credit Calaculation add together Family element Baby element (Under one) One child element for each qualifying child One disability element for each qualifying child One severe disability element for each qualifying child

If you or your partner are entitled to Income Support, Income Based Jobseekers Allowance, Income Related Employment Support Allowance or Pension Credit you will get the maximum Working & / or Child Tax Credits Otherwise the Working & Child Tax Credits are reduced if your household income and earnings are over £6,420 yearly and the Child Tax Credit is reduced if your household income is over £16,190 yearly and you are not working.

NOTES: Working Tax Credits continue while on Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay or Matenity Allowance and for an additional 13 weeks after Maternity or Adoption pay finishes

Example: David is single 17 and has DLA low care and works 20 hours weekly earning £120 weekly.

Calculation: Basic Element £1,920 Disability Element £2,570 Total maximum award £4,490 Weekly this is £86.35

Fiona is a single parent with four children aged 4,7,12,17 the 7 year old has DLA High Care she does not work, she has Carers Allowance at £53.90 weekly and maintenance at £135.

Calculation: Family element £545 4 x Child elements £9,200 1 x Disabled child £2,715 1 x Severe disability £1,095 Total maximum award £13,555 Weekly this is £260.68

As Fiona has under £16,190 yearly income she will get the maximum weekly amount paid. Maintenance is fully ignored by all benefits now

Billy is 57 & his partner Yvonne is 56 they have 2 children aged 10 & 14, Bill works 35 hours earning £15,000 yearly or £ weekly Yvonne has Incapacity Benefit at £ weekly or £5, yearly. They already have Child Tax Credits at about £81 weekly is this correct?

Calculation: Basic element £1,920 Couple element £1, Hour element £ 790 Family element £ x Child Elements £4,600 Maximum award £9,745 This is £ weekly

Due to their joint income/s at £20, yearly (£15,000 + £5,532.80) this is well over the minimum at £6,420 to allow the full award. Their full award at £ weekly will be reduced by 39% of the excess income.

Calculation: (Excess income) £20, £6,420 = £14, excess income £14, x 39% = £5, Which is £ weekly

So their maximum weekly award due at £ weekly is reduced by £ leaving £81.54 to be paid weekly or £4, yearly